Northern Minnesota's timber industry took another blow today. The Boise Inc. paper mill in International Falls announced plans to cut 265 jobs, and shut down two of its four paper-making machines.
That's devastating news for the small town of International Falls and bad news for loggers all across the region.
Boise reported a $1.2 million loss in the first three months of the year. Company officials blame it on the growing popularity of computers, e-readers and other electronic devices, which have slashed demand for paper.
Speaking on the shutdown, Lori Lyman, public affairs manager at Boise in International Falls, said "It is the right decision for... the future of our mill."
"We have to evolve to meet the challenges that face our industry, and we all know what electronic substitution has done to the paper market, and that's causing -- it's the real driver behind the decline in our industry."
"This is the reality of our times and ... you can't take anything for granted."
Shutting down two machines will allow the plant to run more efficiently, Boise officials said. It will mean the plant will reduce its production of white business paper by 115,000 tons, or about 9 percent. They said the downsizing will allow the company to keep 580 employees at the mill.
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The job cuts are the latest in a string of bad news for the paper industry. A few months ago, the Wisconsin-based Wassau Paper company announced the closure of its Brainerd Mill and elimination of about 130 jobs. Last year, the Verso Paper mill in Sartell, Minn., was shuttered following a deadly Memorial Day fire.
Since 2000, the paper manufacturing industry in Minnesota has cut some 5,000 jobs or about one-third.
Boise Inc. is the largest employer and the economic lifeblood of International Falls. everyone in town will feel the effects of the job cuts, said Paul Nevanen, director of Koochiching County's economic development authority.
"This is the reality of our times and ... you can't take anything for granted," Nevanen said. "When it hits home like this and affects the neighbors and friends to the extent that this is going to, it's really devastating."
There aren't many other employment options in the community, Nevanen said. That means the people who lose their jobs may have to move somewhere else. That's tough for a region that already struggles with an aging, dwindling population.
"We don't have the diversification that other areas have in terms of major employers and even beyond the timber and tourism industries," Nevanen said. "There won't be a lot of opportunities, and especially at the pay rate that these folks were. Boise has always paid very strong and had good benefits packages."
The ripples will be felt far beyond the International Falls city limits. Loggers throughout the region count on Boise to buy their timber, at a time when demand for wood has been flagging.
In 2008, the Canada-based Ainsworth Lumber Company permanently closed three board manufacturing mills in Bemidji, Grand Rapids and Cook.
As of March, Minnesota's wood products industry has lost 6,300 jobs from the peak in 2004.
David Haley owns a logging company in Bigfork and says while most of his business is with the Blandin Paper Mill in Grand Rapids, he knows that many loggers will feel the pinch from the retrenchment at Boise.
The partial shutdown comes at a time when many loggers can't afford any more bad news, Haley said.
"The board market is the one that was really hurt by the housing market crash, and the paper market kind of held steady. It was the one market that guys could kind of count on, was somewhat stable," Haley said.
"And now seeing that the paper market is now not as stable, or financially secure anymore, I mean, it was that one last glimmer of hope that we had. And now that's also showing that it is susceptible.
The downsizing won't happen until October, Boise officials said. They plan to meet with union officials to discuss severance packages for salaried employees.